Job agencies facing fraud inquiry after audit of fees

Linton Besser

JUST 42 per cent of job-finding fees claimed by employment agencies were found to be genuine in a top-level audit released yesterday of the $4.7 billion welfare-to-work program.

As a result, some Job Services Australia providers - private firms and charities contracted by the government to help the unemployed find work - face the prospect of a fraud investigation.

The inquiry suggests the job-assistance industry improperly lodged as much as $106 million worth of false claims from the taxpayer in the past two years. Of this, $25.3 million was the extra loading designed to encourage agencies to source jobs themselves for their clients.

The audit reveals that in one case 77 per cent of job brokerage fees claimed by a provider were false or could not be verified.

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But the government has refused to name the organisation along with the other nine providers who were targeted for the audit, citing commercial-in-confidence restrictions.

The audit, overseen by former public servant Robert Butterworth, ''found a significant incidence of poor administration, claims that could not be confirmed, claims that were not supported by appropriate evidence, and claims that were contradicted by job seekers or employers''.

''Although providers in the audit were selected because they had a higher … claiming rate, it is almost certain that other providers who were not audited will have similar patterns of behaviour, though perhaps on a smaller scale.''

The Butterworth review examined only ''provider brokered outcomes'' - the fee paid when an employment agency actually finds a job for a Centrelink recipient, as opposed to just assisting that person. But there are 162 other kinds of fees that have been claimed by providers under the scheme.

Last month, the Employment Participation Minister, Kate Ellis, announced changes that her office said would reduce the number of fees available by almost half, and yesterday committed to implementing the nine recommendations made by the inquiry.

One of these recommendations is that the government investigate ''other areas of vulnerability'' within the program.

Insiders say the exploitation of a suite of loopholes has become a core part of the business of many organisations working within the program.

The Herald has seen evidence concerning the rorting of the scheme's Employment Pathways Fund, which is meant to pay for things like new clothing or training for job seekers to help them become work-ready, as well as wage subsidies paid to employers.

Indeed, the audit released yesterday made a reference to such problems, adding that ''funds used from the Employment Pathway Fund will be recovered where expenditure was related to invalid brokering service elements''.

All firms contracted to the scheme will now have to verify claims they have lodged since last July. The government will only try to recover from each provider the incentive loading rather than the entire brokerage fee.

The audit used a sample of 14 providers and assessed 5 per cent of brokerage fees claimed in a six-month period last year.

''In a small number of instances,'' the report said, ''job seeker perspectives gave rise to concerns about provider behaviour that warrant further investigation.

''In addition to recovery and potential administrative action, these cases will be referred to the department's investigations area under the current fraud framework.''

The agencies' claims in these cases appeared ''to indicate an intention to create the basis for a false claim''.

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22 Dec
THE federal government will investigate abuse of the multibillion-dollar Job Services Australia program and enforce ''more stringent evidentiary requirements'' on thousands of employment agencies claiming fees under the scheme.

6 Feb
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